Wednesday, April 07, 2010

The BBC report that the court case between the FCC and Comcast has ruled in Comcast's favour:

"The court said the Federal Communications Commission, FCC, had no authority to sanction Comcast for slowing internet traffic to some users."

Media coverage has predictably focused on the impact this ruling will have on the FCC's ability to deliver the National Broadband Plan. For example, FierceCable suggests that this could "spell a long and nasty period of challenges to FCC authority about anything broadband related."

The FCC's memorandum opinion and order from August 2008 explained what Comcast was actually doing when "slowing internet traffic to some users". This reveals that the approach taken by Comcast was more significant and detrimental to users than simply slowing traffic:

“The Associated Press (AP) subsequently conducted several nationwide tests to investigate the allegations that Comcast was interfering with its customers’ use of peer-to-peer applications, including BitTorrent. It concluded that Comcast “actively interferes with attempts by some of its high-speed Internet subscribers to share files online...Comcast’s interference affects all types of content, meaning that, for instance, an independent movie producer who wanted to distribute his work using BitTorrent and his Comcast connection could find that difficult or impossible.” The AP found that Comcast’s conduct had a “drastic effect...on one type of traffic - in some cases blocking it rather than slowing it down.” AP also concluded that “the method used” by Comcast was “difficult to circumvent and involves [Comcast] falsifying network traffic.” Specifically, “when one BitTorrent user attempts to share a complete file with another user” via a TCP connection, Comcast’s servers (through which its users’ packets of data must pass) send to each user’s computer an RST packet (reset packet) “that looks like it comes from the other [user’s] computer” and terminates the connection. One month after the AP’s report, the Electronic Frontier Foundation (EFF) published the results of its own testing and similarly concluded that Comcast was selectively targeting customers who uploaded files using BitTorrent and other peer-to-peer protocols. Like AP, EFF also found examples where the Comcast’s “packet forgery prevent[ed] the transfer of data.””

The FCC argued that such an approach did not "constitute reasonable network management". It also argued that Comcast had additionally compounded the issue by not disclosing its practices to its customers, and that there was also a significant anti-competitive aspect to Comcast's actions:

"Peer-to-peer applications, including those relying on BitTorrent, have become a competitive threat to cable operators such as Comcast because Internet users have the opportunity to view high-quality video with BitTorrent that they might otherwise watch (and pay for) on cable television. Such video distribution poses a particular competitive threat to Comcast’s video-on-demand (“VOD”) service...Comcast has recently placed a significant emphasis on expanding its VOD business, and its VOD revenues have experienced robust growth. Moreover, Comcast has “begun incorporating its VOD content online through sites competing directly with BitTorrent protocol sites.”"

It would seem to me that, in the light of the above, the ruling yesterday against the FCC can only be in relation to the its status and its ensuing ability (or, rather lack of it) to enforce its rulings? The evidence clearly demonstrates that Comcast wasn't acting in accordance with the principles laid down by the FCC? So the issue isn't so much that Comcast denied that what they were doing was wrong, or wasn't in the best interests of their customers (basically, they got found out), but rather simply that the FCC didn't have the power to make them do anything about it.

This seems unfortunate, as in many ways, the FCC's argument is much more enlightened that the current debate over the Digital Economy Bill in the UK: the FCC clearly recognises that file sharing applications like BitTorrent have many perfectly legitimate uses, alongside the distribution of copyright infringing materials. But...are the FCC's principles themselves reasonable? Is the FCC's definition of what constitutes "reasonable network management" itself reasonable?

The FCC's Internet Policy Statement from August 2005 is at the heart of this. It sets out four principles that should underpin broadband services, to "encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet":

Consumers are entitled to access the lawful Internet content of their choice.

Consumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement.

Consumers are entitled to connect their choice of legal devices that do not harm the network.

Consumers are entitled to competition among network providers, application and service providers, and content providers.

All four are subject to "reasonable network management". The FCC's notice of proposed rulemaking on preserving the open Internet, published in October 2009, proposed two additional principles:

Subject to reasonable network management, a provider of broadband Internet access service must treat lawful content, applications, and services in a nondiscriminatory manner.

Subject to reasonable network management, a provider of broadband Internet access service must disclose such information concerning network management and other practices as is reasonably required for users and content, application, and service providers to enjoy the protections specified in this part.

The notice goes on to define "reasonable network management" at paragraph 135:

"Reasonable network management consists of: (a) reasonable practices employed by a provider of broadband Internet access service to (i) reduce or mitigate the effects of congestion on its network or to address quality-of-service concerns; (ii) address traffic that is unwanted by users or harmful; (iii) prevent the transfer of unlawful content; or (iv) prevent the unlawful transfer of content; and (b) other reasonable network management practices."

The definition has been kept intentionally broad, to ensure providers have sufficient opportunity and flexibility to innovate as user needs and traffic patterns change. Which seems reasonable to me?

So what impact does this ruling have on the National Broadband Plan? The FCC's own statement affirms that it isn't its principles which are in question here: "...the Court in no way disagreed with the importance of preserving a free and open Internet; nor did it close the door to other methods for achieving this important end." The FT (Comcast victory thwarts FCC plans) outlines what these other methods could be:

"Analysts said the FCC had several options. It could move to challenge the appeals court ruling at the Supreme Court. More immediately, it could press ahead with attempts to regulate broadband providers under the strict confines laid out by the lower court. But, in what is seen as its most likely option, it could reverse Bush-era policies and redesignate broadband as a “Title 2” service, opening the door to a new era of regulation, including controls on pricing."

More on the reclassifying/redesignating option in this previous post. There seem to be two aspects to such a reclassification: not only would it give the FCC greater regulatory power over broadband providers (and its subsequent ability to deliver the plan), it would also (according to the plan) "provide a sounder legal basis for establishing direct support for rural broadband under the Universal Service Fund’s High Cost program and broadband access under the Lifeline and Link-Up programs." Given Comcast's actions, is it arguable that greater regulatory oversight is needed to prevent such instances in future, as well as to support delivery of the plan?

The applecart that's been upset on this side of the Atlantic is the 50p Landline Duty, as reported by the BBC:

"The broadband tax has been scrapped in the last-minute scramble to rush key legislation through before Parliament is dissolved next week...The Conservatives have always opposed the tax, preferring to allow the market more time to roll out services before government intervention. The levy was among three taxes in the Finance Bill to be dropped...It is likely to be reinstated if Labour is re-elected in the 6 May general election."

The FT (Tories force 'wash-up' taxes reversal) reports that the Conservatives will "instead pay for the policy using part of the BBC licence fee." The wash-up also includes the Digital Economy Bill, which will face further scrutiny even if it's passed later today, according to the BBC.